Mylan N.V. (MYL)
Update 3/14/2017: MYL rose sharply after earnings were published and the declined beginning three days later. I exited at 15.6% of maximum potential profit, an early management of the position that evaded what looked to be a movement in the direction of loss. The price remains above the pre-announcement level.
Shares rose by 2.1% over 14 days or a 55% annual rate. The options position produced a 29.9% yield on debit for a +780% annual rate
MYL publishes earnings on Wednesday before the opening bell.
I shall use the APR series of options, which trades for the last time 52 days hence, on April 21.
Implied volatility stands at 39%, which is tripple VIX, a measure of the volatility of the S&P 500 index.
MYL’s IV stands in the 33rd percentile of its annual range and the 81st percentile of its most recent broad movement.
The price used for analysis was $41.47.
|Premium:||$3.71||Expire OTM||iron fly|
The premium is 49% of the width of the position’s wings.
The risk/reward ratio is 1:1.
Decision for My Account
I have entered a position on MYL as described above. The stock at the time of entry was priced at $41.53.
By Tim Bovee, Portland, Oregon, Feb. 28, 2017